Mumbai Commands India's Residential Market as Q3 2025 Sales Hit 24,706 Units; Grade A Office Rents Jump 11% Year-on-Year

India's financial capital has once again demonstrated its unmatched position in the country's property sector, with Mumbai recording the nation's highest housing sales volumes during the third quarter of 2025 while simultaneously witnessing a sharp 11% year-on-year surge in office rental rates. The twin developments reflect the city's continued magnetism as a premium real estate destination and its structural resilience amid evolving market dynamics.

Residential Segment: Mumbai Retains National Leadership with Over 24,000 Home Sales

Data from the third quarter of 2025 revealed that Mumbai achieved total housing sales of 24,706 units, marking a modest yet positive 2% increase compared to the same period in 2024. This figure placed the city firmly at the forefront of residential transactions across India's major metropolitan regions, reaffirming buyer confidence in mid-tier to premium housing segments. The sustained demand underscores Mumbai's reputation among committed homebuyers seeking quality properties in established neighbourhoods.

Other key cities displayed varied performance trajectories during the quarter. Bengaluru recorded 14,538 residential transactions, though year-to-date figures indicated a slight decline. Meanwhile, demand in Delhi-NCR and Pune remained relatively subdued, contrasting with healthy growth registered in Hyderabad and Chennai. This divergence highlights the uneven recovery patterns across regional markets, with Mumbai's luxury real estate surge continuing to attract investors and end-users alike.

New Launches Decline as Developers Exercise Supply Discipline

On the supply front, new residential launches in Mumbai totalled 19,145 units during Q3 2025, reflecting a 19% year-on-year contraction. Industry observers noted that developers appeared to be prioritising project execution and quality over sheer volume expansion. This calculated approach has helped prevent market oversupply and stabilised price levels, with average residential prices in Mumbai rising by 7% year-on-year. The strategy mirrors broader trends across the state, where Maharashtra's achievement of 30 lakh PMAY homes has showcased how disciplined planning can drive sustainable growth.

The price appreciation was particularly pronounced in higher ticket-size segments, where demand from affluent buyers remained robust. Premium micro-markets such as South Mumbai and select locations in Byculla's heritage hub continued to witness strong traction, reinforcing the city's bifurcated market structure.

Commercial Real Estate: Strong Rent Growth Despite Leasing Moderation

Mumbai's office market showcased resilient fundamentals throughout the third quarter, with average transacted rents for Grade A commercial spaces rising 11% year-on-year. This growth occurred despite a relatively soft base effect from Q3 2024 and reaffirmed demand for premium office inventory in the city's core business districts. The rental appreciation marked the thirteenth consecutive quarter of positive or stable year-on-year rent growth, underscoring the structural maturity of Mumbai's commercial property ecosystem.

Transaction Volumes Moderate, but Mumbai Retains Central Role

Office leasing activity during Q3 stood at 0.18 million square metres (approximately 1.9 million square feet), representing a 27% year-on-year decline. However, Mumbai continued to account for a significant share of India's total office absorption, alongside Bengaluru and Delhi-NCR. Together, these three cities captured half of the country's quarterly leasing volume, emphasising Mumbai's enduring centrality in the India's commercial rentals landscape.

The moderation in transaction volumes was attributed to selective tenant behaviour and a cautious approach by occupiers amid broader economic recalibration. Nevertheless, sectors such as banking, financial services, insurance (BFSI), information technology, and co-working operators continued to drive leasing activity, particularly in established office corridors and emerging Navi Mumbai office hubs.

Fresh Supply Surges to Meet Pent-Up Demand

New office completions during the quarter totalled 0.14 million square metres (1.6 million square feet), marking a sharp 94% year-on-year increase. This surge in fresh supply reflected developers' efforts to address pent-up demand and narrow the gap between leasing momentum and available inventory. Several Grade A projects reached completion across key micro-markets, including L&T Innovation Campus in Powai, further enhancing Mumbai's commercial infrastructure.

The supply catch-up is expected to provide occupiers with greater choice and potentially moderate rental escalations in peripheral locations, even as core business districts maintain pricing power. The trend aligns with broader market dynamics observed in other metros, where India's flex space market has seen pre-leasing activity surge amid supply constraints.

Strategic Implications for Investors and Developers

Premium Location Resilience

Despite macroeconomic headwinds and elevated interest rates, well-positioned residential and commercial assets in Mumbai continued to command strong demand and pricing. Established neighbourhoods such as Mahalaxmi's luxury property market and Dadar's residential corridors exemplified this resilience, with investors prioritising quality over quantum.

Supply Discipline Yields Stability

The deliberate slowdown in new residential launches signalled that developers were cautiously calibrating supply to align with demand. This approach has helped maintain price stability and prevented inventory build-up, a critical factor in ensuring long-term market health. The strategy is particularly relevant given broader policy initiatives such as Maharashtra's new housing policy targeting 3.5 million affordable homes.

Commercial Sector Growth Levers

With rental appreciation holding firm and fresh supply entering the market, Mumbai's office segment appeared poised for a potential acceleration in leasing activity. Sectors expanding their footprint in the city, including BFSI, IT and technology services, and co-working operators, are likely to drive absorption in the coming quarters. The infrastructure push exemplified by projects such as the Mumbai Coastal Road and Metro-8 connecting Mumbai to Navi Mumbai airport will further enhance commercial district accessibility.

Urban Market Bifurcation

Peripheral and secondary micro-markets stood to benefit from spillover demand as core districts absorbed more inventory and prices firmed. This bifurcation trend suggested that emerging corridors and suburban nodes could offer attractive risk-adjusted returns for developers and investors seeking value plays within the Mumbai Metropolitan Region. Areas like Borivali housing developments and Arkade Developers' projects exemplified this spatial expansion dynamic.